Trump Takes Coronavirus Cues From Stock Market

Trump and his administration are taking cues from the stock market on when to reopen our country. Is that really the best place to get advice on a public health crisis?

Today, Trump tweeted that the stock market shows why states should reopen ASAP, making clear where he is taking his cues on public health.

TRUMP: “Stock Market up BIG, DOW crosses 25,000. S&P 500 over 3000. States should open up ASAP. The Transition to Greatness has started, ahead of schedule. There will be ups and downs, but next year will be one of the best ever!”

Last night, Kudlow claimed that we know the pandemic is getting better because the stock market is going up, since it was right about the crisis getting worse in February and March.

KUDLOW: “Back last winter when stocks started plunging in late February and early March it did signal that the pandemic was spreading exponentially and it would one way or another damage the economy, and it was the right signal. So I think it’s up 30%, 32%, the Dow Jones at least since the bottom on March 23. I hope that holds. I hope that is the bottom. I’d love to see the 30% number go higher. And so I think that says the virus is flattening. The market loves that.” [77WABC, 5/25/20]

But in February and March, Kudlow was very wrongly predicting that coronavirus would have a minimal impact on the economy.

February 7KUDLOW: “Well look, the Coronavirus is essentially a China problem, and we’re doing everything we can to help them by the way — offering advice, sending smart people over there, and so forth. It’s not a U.S. problem. The impact on the American economy will be very, very, very small if any.”

February 14 — KUDLOW: “We’re thinking maybe in the first quarter, we lose two or three tenths of GDP—two or three tenths of one percent of GDP.” [Maria Bartiromo’s Wall Street, Fox Business, 2/14/20]

March 6KUDLOW: “I’m just saying, let’s not overreact. In many ways, America should stay at work…I just don’t want to panic. I don’t want to panic on the economy, which looks sound. I don’t want to panic on the virus, which frankly, most Americans are not at risk. And I don’t want to panic on policy measures. Let’s try to be calm and not overreact.”

March 16KUDLOW: “The fundamentals of the economy are strong. In fact, you know, we’ve had so many business groups in, they’ll tell you, you know, through February, January, February, the economy was rising and the Atlanta Fed GDP now is showing three percent of 3.1 percent.”